Cable train back on track, much less crowded

Cable has bounced ninety pips from support in the 1.5720/30 area as the dollar goes plop across the board. Traders are much less long of the pound on this run higher suggesting the move has some legs.

Traders are mulling over the comments from the dueling MPC members, Posen and Sentance. Both are on the extremes of the dove/hawk divide, this much we know, but Posen went off the rails today by not only suggesting more gilt buying from the BOE but buying of corporate debt as well, the nuclear option for central banks. That caught the market’s fancy for a time until the dollar downtrend reasserted itself.

If looking to take a long-term bullish view on cable, keep stops below the 1.5700 level, below the old range tops in the 1.5700/10/20/30 area.